Mar 13 - The Miami Herald

A study released by the National Association of Manufacturers and the American Council for Capital Formation warns the Lieberman-Warner climate change bill might have a larger impact on the U.S. economy than previously expected.

Environmentalists immediately objected to the assessment. "It's more of the same hollow scare tactics we've heard before," Tony Kreindler of the Environmental Defense Fund wrote The Herald in an e-mail.

The NAM-financed study, conducted by Science Applications International, predicted the legislation intended to deal with global warming could cause:

Gross Domestic Product (GDP) losses of $151 billion to $210 billion in 2020 and $631 billion to $669 billion per year in 2030.

Employment losses of 1.2 million to 1.8 million jobs in 2020 and three million to four million jobs in 2030.

Household income losses of $739 to $2,927 per year in 2020 and $4,022 to $6,752 per year in 2030.

Electricity price increases of 28 percent to 33 percent by 2020 and 101 percent to 129 percent by 2030.

During a conference call Thursday morning, NAM President John Engler responded to a journalist's question about the credibility of the study financed by business groups: "There is almost a surrealist aspect in comments made by some people and some groups" with respect to how low the costs of reducing greenhouse emissions might be.

"There is an obligation to have a debate about this," Engler said. "What we've tried to do is set a high bar for analysis."

The estimates are on the gloomier side of what has become a war of predictions on the cost of climate change in the United States.

The Environmental Defense Fund criticized the NAM study for many reasons, including no use of market tools to manage costs, artificially limited use of offsets, very limited use of renewable energy and unreasonably high oil prices.

Most importantly, wrote Kreindler, the report ignores the "costs of inaction. According to recent studies by the University of Maryland and Tufts University, unchecked climate change will strain public budgets and impact jobs and competitiveness in every economic sector. Their conclusion: the most expensive climate policy is not having one at all."

Earlier this month, one group of utilities, including Florida Power & Light, warned that estimates prepared by the power industry's own trade association, the Edison Electric Institute, were unrealistically predicting dire consequences. Environmental groups also believe the EEI estimates are too high.

The EEI report, prepared by the consulting firm Charles River Associates, predicted the proposed bill could lead to 80 percent increases in the price of residential electricity.

A study commissioned by FPL suggested the fees might at first add only $7.50 to $10 to the average Florida customer's monthly bill.

A full copy of the NAM-financed study can be found at www.accf.org  or www.nam.org/climatechangereport .

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